Gov. Sean Parnell announced in July that Alaska would not create a state-run health insurance exchange, and he is sticking by that, Parnell spokeswoman Sharon Leighow said Tuesday.

Under the federal Affordable Care Act, each state is supposed to have an exchange, a marketplace where residents can shop for private health insurance and apply for federal subsidies to help pay for it, if they are eligible.

States can create the exchanges on their own, or do it in partnership with the federal government, or leave the whole project to the U.S. Department of Health and Social Services.

The deadline for states to declare that they'll run their own health exchange is Friday.

Alaska will neither do that, nor partner with the federal government on a joint exchange, Leighow said.

In rejecting a state-run plan last July, Parnell said, "Federally mandated programs should be paid for by federal dollars."

Democratic U.S. Sen. Mark Begich said if the state took control, it could have joined with some other states and created a bigger pool for Alaskans wanting to buy insurance.

An estimated 118,000 Alaskans are uninsured, he said.

The exchanges will work similarly to what happens when you buy a plane ticket on Expedia, Begich said. "It's a one-stop shop for individuals. ... Because you're part of a larger group, therefore there are shared risks. It would be cheaper than if you were out looking individually."

The health exchanges grew out of an earlier bill that had bi-partisan support, and was targeted at helping small businesses get better insurance by creating a larger pool, Begich said.

"It's one of the easiest things to help small businesses," he said.

Democratic state Sen. Hollis French, who sponsored a bill to set up a state-run exchange, said, "You always want to have your voice influencing events. ... Who knows best? Who's close to the problem? There are many instances where your local knowledge is superior to a bureaucrat in Washington."

French's bill never got to a vote in the Legislature.

A spokesman for U.S. Sen. Lisa Murkowski, R-Alaska, said since Alaska has a small population and an "enclosed health care system with few health care providers to create a great degree of competition," it may not make much difference whether the federal government or the state runs a health exchange.

Murkowski spokesman Matthew Felling said, "... it is unlikely that in a state like Alaska with few insurers, and without the ability to buy insurance across state lines, that health care costs will be reduced in any meaningful way."